There are many aspects you should consider before signing a management agreement :

Management of your assets, of course;

Keeping of your assets;

Execution of transactions;

Professional investors (pension funds, trusts, and so on) usually distribute these tasks to trustworthy institutions, but most private investors don’t, and their asset managers cumulate these various responsibilities.

Consequently, there are specific costs related to these specific tasks that must be considered and negotiated :

Management fees;

Custody fees;

Stock-exchange transaction costs;

Open-ended funds transaction costs;

Foreign exchange transaction costs;

Transfer costs (assets or cash);

Etcetera...

Of course the rates of above-mentioned costs and fees must be taken into account, as well as the types of assets on the basis of which these costs and fees are calculated. For example, when in-house funds (which are subject to management fees inside the fund) are incorporated into a portfolio, they are generally not included in the calculation of additional management fees and custody fees.

Costs have a significant impact on your long-term return. So don’t be afraid to negotiate ! Asset management is a competitive industry and investors have the bargaining power on their side.

If you would like more information on this please don’t hesitate to contact us.